Renault Chief Warns Falling EV Demand Could Cost Industry Billions in Fines

Due to the downturn in demand for electric vehicles, European car makers could be fined more than $15 billion for carbon emissions.?

The stark warning came from Renault chief executive Luca de Meo, who stressed that the expectations placed upon the industry are not a realistic target as things stand.

He admitted the sector is struggling to keep pace with European Union directives, with consumer demand flagging.

Looking ahead to next year, automakers face more stringent EU CO2 targets, with the cap on average emissions from new vehicles dropping to 94 grams/km from the current 116g/km level.

Speaking to France Inter Radio, de Meo outlined that if EV sales remain at the same level, the European auto industry will need to pay $15 billion ($17.4b) in fines or give up on the production of more than 2.5 million vehicles.

The 57-year-old Milan-born executive, who also serves as president of the European Automobile Manufacturers Association (ACEA), added a plea for leniency:

“Everyone is talking about 2035, in 10 years, but we should be talking about 2025 because we are already struggling,” he said.

“We need to be given a little flexibility. Setting deadlines and fines without being able to make that more flexible is very, very dangerous.”

BMW and Volkswagen Join Renault to Call for Review of EU Targets

The switch to electric is not happening as fast as EU lawmakers had anticipated, causing anxiety in the industry. Sales are lagging by around 50% of the quota required, in order to avoid the financial penalties, as expressed by the Renault boss.

The guidelines state any excess of CO2 limits can result in fines of 95 euros ($105) per excess CO2 g/km multiplied by the number of EV units sold, leading to sanctions worth billions across the industry.

It is not just Renault that has raised the alarm on this issue; earlier this year, BMW and Volkswagen joined the French auto brand in criticising?the emissions targets.

“We believe a comprehensive review of CO2 fleet legislation in the EU is essential,” said BMW CEO Oliver Zipse.

BMW was apparently on track to meet its internal 2025 emissions goals, but there is a feeling of frustration that customers’ choices will sway the industry’s fortunes—and the current slump is evidence of that.

VW CEO Oliver Blume added that it was unfair that the industry was to be punished for not meeting the framework objectives when the conditions were not in place top- achieve the ramup to electric.